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Change management

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Change management

  2. 2. Change is important for individual, corporate, institutions and even the country to adapt itself to changing environment. •Change is the key to success in today’s time. • Today, change is not the exception but a steady ongoing process.
  3. 3. DEFINITION OF CHANGE MANAGEMENT Change Management means to plan, initiate, realize, control and finally stabilize change processes on both corporate and personal level. • Change may cover such diverse problems strategic direction or personal development programs for staff. • Change is the continuous adoption of corporate strategies and structures to changing external conditions.
  4. 4. •Change comprises both, revolutionary one-off projects and evolutionary transformations. • We find that most people have negative attitudes and perceptions towards change. •They have fears of losing their job, their status or their social security, or they are afraid of a higher workload.
  5. 5. • In many cases, first effects of change on employees, leaders, and on performance levels are negative. •These effects include fears, stress, frustration and denial of change. •Most employees tend to react with resistance to change rather than seeing change as a chance to initiate improvements. •They are afraid of losing something, because they have incomplete information on how the change processes will effect their personal situation in terms of tasks, workload, or responsibilities
  6. 6. •Managers need to keep in mind those negative side-effects of change initiatives in order to achieve the expected positive results. • The success of change projects depends on the organization’s ability to make all their employees participate in the change process in one way or the other.
  7. 7. Dynamics of Change • According to Alvion Toffler the man’s existence is 50,000 yrs. Old. • If divided into period of 62 years (Life time) than man’s existence is 800 life time. • From the total of 800 life times 650 life times man has spent in caves.
  8. 8. Dynamics of Change • Only during 70 life times man has been communicating and passing knowledge from the life time to another. • During the last six life times man has been possible to measure time with precision.
  9. 9. Time Skip • Present life time man has seen automation, computerization; space research; nuclear advancement, satellite, microwaves and internet applications. • Man is caught in what might be called “Time Skip”. • In fact “Cultural Shock” has taken place in Social, Political; Scientific and cultural environments.
  10. 10. Time Skip • Future shock is the premautre arrival of the future. • Future shock is a time phenomenon, a product of greatly accelerate rate of change in the global society.
  11. 11. • The need to replace complacency with a desire to continually improve goes back to the early days of the modern management era. • This idea has been accelerated by the Total Quality Management (TQM) movement. • However, things are moving much more rapidly in the 21st century, and in this environment, incremental transformation is not enough.
  13. 13. PerceivedCompetence Time 1. Shock 2. Refusal 3. Rational Understanding 4. Emotional Acceptance 5. Exercising 6. Realisation 7. Integration THE SEVEN PHASES OF CHANGE
  14. 14. THE SEVEN PHASES OF CHANGE 1. Shock and Surprise:- Confrontation with unexpected situations. This can happen ‘by accident’ (e.g. losses in particular business units) or planned events (e.g. workshops for personal development and team performance improvement.) 2. Denial and Refusal:- People activate values as support for their conviction that change is not necessary.
  15. 15. THE SEVEN PHASES OF CHANGE 3. Rational Understanding:- People realize the need for change. - According to this insight, their perceived competence decreases again. - People focus on finding short term solutions, they only cure symptoms. - There is no willingness to change own patterns of behavior.
  16. 16. THE SEVEN PHASES OF CHANGE 4. Emotional Acceptance:- This phase, which is also called ‘crisis’ is the most important one. -Only if management succeeds to create a willingness for changing values, beliefs, and behaviors, the organization will be able to exploit their real potentials. 5. Exercising and Learning:- The new acceptance of change creates a new willingness for learning. -People start to try new behaviors and processes. - They will experience success and failure during this phase.
  17. 17. THE SEVEN PHASES OF CHANGE 6. Realization:- People gather more information by learning and exercising. -This knowledge has a feedback-effect. -People understand which behavior is effective in which situation. 7. Integration:- People totally integrate their newly acquired patterns of thinking and acting. - The new behaviors become routine.
  19. 19. THE PSYCHOLOGY OF RESISTANCE TO CHANGE • Unless the change being proposed strengthens in a visible and unambiguous way the psychological security of the people is affected – change will be resisted. •Most of us, being human, feel our security threatened from time to time. • The extent to which we feel secure is mainly dependent on our cumulative experience since birth.
  20. 20. • All of us at one time or another have had the experience that, despite the planning, hard work and careful thought we have put into a new scheme, people won’t go along with it. • This is often a source of disappointment when we find that our brilliant ideas and logical analysis are just simply rejected. • Change, however is more than an intellectual process. • It is a psychological process as well. THE PSYCHOLOGY OF RESISTANCE TO CHANGE
  21. 21. Factors that determine how an individual might feel about a change that affects him. - Basic predisposition to change (derived from birth experiences, early feeding and weaning toilet training, sibling rivalries etc.) - Personal sense of security (dependent on individual personality and current circumstances such as financial and marital status, etc.) THE PSYCHOLOGY OF RESISTANCE TO CHANGE
  22. 22. - Prevailing cultural beliefs (relating to a particular country, or community, class trade or even work groups) - Extent of trust and loyalty (resulting from past and present relationships with management, union and work groups.) - Objectives historic events (including the nature of after- effects of past changes, natural and regional patterns of unemployment, labor mobility, government interventions, etc.) THE PSYCHOLOGY OF RESISTANCE TO CHANGE
  23. 23. -Specific apprehensions and expectations about the particular change (relating the individual to the content and method of the change, to the work group and to the organization as a whole). • Each situation and each individual tend to be unique and hence it is difficult to predict how a particular change will be regarded by those affected. • Conditions for man’s psychological readiness to change. THE PSYCHOLOGY OF RESISTANCE TO CHANGE
  24. 24. • The factors that influence an individual’s attitude towards a change, the manner of change is the one most under the control of the change catalyst, manager, consultant, or whoever is introducing the change. • Some general principles of reducing resistance to changes are briefly considered under three types of heading viz. Who brings the change? What kind of change? And procedures in instituting change? THE PSYCHOLOGY OF RESISTANCE TO CHANGE
  26. 26. INSTITUTING CHANGE Resistance will be reduced: • If participants have joined in diagnostic efforts leading them to agree on what the basic problem is and to feel its importance. • If the project is adopted by consensus following group discussion. • If the parties involved can see both sides of the question and recognize valid objections and take steps to relieve unnecessary fears.
  27. 27. INSTITUTING CHANGE • If it is recognized that innovations are likely to be misunderstood and misinterpreted, and if provision is made for feedback of views on the project and any further clarification. • If participants can begin to develop acceptance of each other and so experience support, trust and confidence in their relations with one another. • If the project is kept open to revision and reconsideration if experience indicates that a change in direction or emphasis would be desirable.
  28. 28. • Managers need to know in which phase they have to expect what types of situations and problems. • Most successful organizations are those that are able to adjust themselves to new conditions quickly. • This requires planned learning processes that lead to improved organizational effectiveness. • Normally, people perceive change processes in seven typical stages.
  29. 29. Resistance will be less; • If managers, supervisors, union leaders and other key people involved in the organization feel that a programme of planned change is their own- not one devised and operated by outsiders. • The way in which the change is introduced. • If any programme started clearly has the whole- hearted support from the people with the groups concerned.
  30. 30. Resistance will be less: • If participants in any project see the change as reducing rather than increasing their current burdens; • If the project accords with values and ideals which have long been acknowledged by the participants; • If the programme offers the kind of new experience that interests participants; • If participants feel that their autonomy and security is to threatened.
  32. 32. • People exposed to war or disaster may develop a nervous breakdown, people with exposed to rapid changes of modern life may develop state of helplessness and inadequacy. • The ‘Life Change Scale’ is a psychological tool which measure the amount of change experienced by a person over a given time interval. • The ‘Life change’ questionnaire asks people to mark on a list which important changes they recently underwent: move to new home, new job, marriage, divorce travel promotion etc.
  33. 33. • The total score for a person is calculated as the sum of all changes that the person experienced multiplied by their relative weights. • Using this scale, it was shown that individuals with high life change scores are significantly more likely to fall ill. • It turned out that illness correlates with all changes, positive as well as negative.
  35. 35. • Organizations must undertake organization-wide change to evolve to a different level in their life cycle, e.g., going from a highly reactive, entrepreneurial organization to more stable and planned development.
  36. 36. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE • Change is the biggest challenge for the leader in the new millennium. • Keeping pace with the complexity and the rate of change, have become the most critical factors for the organizations today.
  37. 37. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE • Millennium leaders will be known – - Less for what they say, and more for what they deliver. - Less by the goals they set, and more by the mindsets they build. - Less by what they control, and more by what they shape.
  38. 38. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE • Millennium leaders will be known – - More for Vision, Change leader and Knowledge management. - More for Process they create; Integrative Thinking and Innovation. - More for keeping pace with complexity and Speed – expectation @ of Speed of Thought.
  39. 39. LEADERSHIP – WINNERSLEADERSHIP – WINNERS • The only survivors of this onslaught will be corporations headed by leaders - endowed with the ability to see what lies ahead. • To create necessary resilience to deal with the future.
  40. 40. •The road to leadership is a transforming journey for anyone who pursues it diligently and patiently. • Leadership is more a function of the heart than mind.
  41. 41. Effective leadership has become more critical because of – •The rapidly changing socio, political and business environment. •Coping with complexity and coping with change.
  42. 42. TYPES OF CHANGES There are two types of changes: • Organizational Development:- It is more gradual and evolutionary approach to change. -It bases on the assumption that it is possible to align corporate objectives with the individual employee’s objectives. - In practice, however, this will rarely be possible.
  43. 43. • Reengineering:- It is a corporate transformation or business transformation. - It is the more radical form of change management as it challenges all elements of processes or structures that have evolved over time.
  44. 44. Quantum Leaps- The explanation • A MINI LEAP is consistent with the notion of continuous improvement. It means from point A to point B • A MEDI LEAP is more ambitious. It means skipping one iteration of progress. Moving directly from point A to Point C • A MEGA LEAP OR QUAMTUM LEAP is the most ambitious of all. It means skipping two iterations of progress or improvement. Moving from Point A to Point D
  45. 45. The Quantum Leapers Continuous Improvement aKa The MINI LEAP A B C D THE MEDI- LEAP A B C D THE MEGA LEAP or Quantum Leap A B C D Giant Steps are taken that jump over two or more generations of progress
  46. 46. Exemplification • A good case study of a Quantum Leaper is Syntel, an electronics manufacturer. When Companies were producing chips that had capacity from 4K to 64K, Syntel produced chip with a whopping capacity of 256K memory. • But Quantum Leap is not always possible. There are times when it is necessary to move slowly at first, restricting to medi leaps or even mini leaps
  47. 47. Attributes of Quantum Leapers They Institute a Climate of Innovation • Quantum Leap companies encourage employees at all levels to speak up about any and all matters concerning the organization • The best- ideas received come from non- professionals who see things from a different view point • To develop this innovative atmosphere, these organizations use both formal and informal approaches
  48. 48. • ‘Idea- Meetings’ are another form of program that generates ideas and cultivates creativity. Participants are told the subject of the meeting beforehand and are expected to get at least one idea related to it. • Quantum Leapers conduct brainstorming sessions to generate ideas and encourage participants to express any and all ideas that emerge. They use the psychological principle called “triggering” • When suggestions are carefully considered with rapid feedback, the programs not only succeed but add to the culture of innovation
  49. 49. Benchmark • Quantum Leapers are the first to admit they do not have all the answers and are on the Learning Curve. • They are always in the process of seeking out ideas from other organizations who have faced similar situations and benchmarking against best practices.
  50. 50. Foster an Entrepreneurial Spirit • Entrepreneuring is not limited to small, independent environments. Large organizations encourage this and is called “Intrapreneuring”. The intrapreneur may be a creator, inventor or dreamer, but he figures out ways to turn an idea into a profitable reality. • The following should be the culture traits to support: – Listen to anyone with an original idea – Encourage; don’t nitpick. Let people run with an idea – Hire good people and leave them alone – If you put fences around people, you get sheep. Give people the room they need – Encourage experimental doodling, give it a try- and quick
  51. 51. Willing to take Risks • The Quantum Leapers do not stay inside the safe shell of complacency. • They are willing to take risks and move ahead • Risk taking, in certain cases, is part of the Corporate Culture of all Quantum Leapers
  52. 52. Anticipate Trends • Quantum Leapers are proactive and work on the future trends. The Software Industry is full of such examples: • Steve Jobs anticipated the demand for personal computers with the Apple Computer and later Macintosh. Bill Gates saw the trend towards packaged software. The founders of Amazon.com revolutionized the book selling business. • Such people are called trend- setters
  53. 53. Thinking two or three moves ahead • Like good chess players, the Exponential Manager plans several steps ahead before making a move. • To make a Quantum Leap, one must be able to anticipate what the effect will be on variety of factors.
  54. 54. Believe in Empowerment • Empowerment is giving of the power held by a manager to those being managed. In an empowered environment, the supervisor brings the workers together and says: “Here is our project, let’s determine how it should be done” • There are 3 major advantages to this: – Ideas- People who work on the job can provide deeper insights to a situation – Synergy- When people work together in developing a project, an interrelationship develops among them that leads to collaborative efforts to achieve success – Ownership- People are committed to success when they are involved in designing of the project
  56. 56. • Before an organizational culture can be changed, it must be analyzed and assessed. • It is necessary to understand the culture and determine what problems exist and how seriously they affect productivity, quality of product or service, morale of the workers and the overall efficacy of the organization. • Perception is Reality in the minds of the perceiver
  57. 57. •It creates distinction between one organization & the other. •It conveys a sense of identity for organization members. •It facilitates the generation of commitments to something larger than one’s individual self- interest. •It enhances the stability of the social system. WHAT DOES CULTURE DO
  58. 58. Need for new organizational culture • Organizations are restructuring, downsizing and outsourcing, employee morale has fallen to new depths. • The unconditional loyalty and dedication of employees who looked upon their jobs as careers and their employment as relatively secure is replaced in many companies with uncertainty .
  59. 59. A new organizational culture must be developed to overcome barriers to change and renew - an attitude of commitment and cooperation.
  60. 60. DIFFICULT Y IN ACCOMPLISHING ORGANIZATION CHANGE • There are strong resistances to change, people are afraid of the unknown. • Many people think things are already just fine and don’t understand the need for change.
  61. 61. WAYS FOR CARRYING ORGANIZATION CHANGE • Successful change must involve top management, including the board and chief executive. • Usually there’s a champion who initially instigates the change by being visionary, persuasive and consistent. • A change agent role is usually responsible to translate the vision to a realistic plan and carry out the plan.
  62. 62. WAYS FOR CARRYING ORGANIZATION CHANGE • Change is usually best carried out as a team- wide effort. • Communications about the change should be frequent and with all organization members. • To sustain change, the structures of the organization itself should be modified, including strategic plans, policies and procedures.
  63. 63. What is “Revitalising People” • Revitalising People entails – Change of Attitude – “Mindset Change” • But can we teach Old hays…new Tricks??
  64. 64. It is observed that: • Some Individuals with the same attitude and personality traits, can behave differently with different context. • To change the behavior, the context has to be changed.
  65. 65. What does the Organisation want from it’s People? • The Organisation wants it’s People to: – Collaborate – Share – Help each other – Feel a sense of commitment – Take initiative – Learn continuously – Bring benefits of learning – Support company success
  66. 66. Overall, the point is simple: If you wish to see Initiative, Collaboration, Commitment and Learning, the Challenge is to Change/ Create the right “Smell of the Place” -Culture
  67. 67. Potential dysfunctional aspects of culture • Barriers to change • Barriers of diversity • Barriers to acquisitions CULTURE AS LIABILITY
  68. 68. - Sensitive to ones own culture and also to other’s culture - Building relationships quickly, generating collaborations. - Ability to work with cross functional teams - Humility to learn and adapt CULTURE AND RELATIONSHIP
  69. 69. GLOBAL MANAGER According to Andrew Kakabadse: • There are two views about global manager a. Global manager is a manager b. They are entirely different breed of executives The stronger view is they are different breed of executives What make a GLOBAL MANAGER exceptional -that he can think across the cultural boundaries.
  72. 72. GALLUP SURVEY • It is a feedback system tied to bottom line – sales growth, Productivity and Customer Loyalty for the employees that would identify and measure elements of worker engagement. • Studies have revealed that: - Employee actively engaged in job role: 29% - Employees not engaged in job role : 54% - Employees disengaged in job role : 17%
  73. 73. Questions Your Rating Q01 I know what is expected of me at work. Q02 I have the materials and equipment to do my work right. Q03 At work, I have the opportunity to do what I do best every day. Q04 In the last seven days, I have received recognition or praise for doing good work. Q05 My supervisor, or someone at work, seems to care about me as a person. Q06 There is someone at work who encourages my development. Q07 At work, my opinions seem to count. Q08 The mission or purpose of my organization makes me feel my job is important. Q09 My associates or fellow employees are committed to doing quality work. Q10 I have a best friend at work. Q11 In the last six months, someone at work has talked to me about my progress. Q12 This last year, I have had opportunities to learn and grow. Employee Engagement Effectiveness Index (5=Strongly Agree, 4=Agree, 3= Neither Agree nor Disagree, 2=Disagree,1=Strongly Disagree)
  75. 75. Questions Your Rating Q01 My manager/supervisor demonstrates competence in his or her job. Q02 My manager/supervisor treats everyone fairly (i.e., plays no favorites). Q03 My manager/supervisor creates a motivating and supportive work climate. Q04 My manager/supervisor represents my needs, ideas and suggestions to his/her manager. Q05 My manager/supervisor takes an interest in my professional growth and development. Q06 My manager/supervisor involves me in decision making, problem solving and planning processes. Q07 My manager/supervisor creates a high performance and collaborative work team. Q08 I have the opportunity to interact with Management above my immediate supervisor. Leadership Effectiveness Index (5=Strongly Agree, 4=Agree, 3= Neither Agree nor Disagree, 2=Disagree, 1=Strongly Disagree)
  76. 76. The score of Great Workplace Award should have min. score 4.5 At the same time your engagement is very high to the company. RESULT EMPLOYEMENT ENGAGEMENT SURVEY LEADERSHIP SURVEY The Great Manager should have minimum score 4.5
  77. 77. Strategic Management andStrategic Management and Strategic CompetitivenessStrategic Competitiveness
  78. 78. Corporate Strategy Directional Strategy: – Orientation toward growth • Expand, cut back, status quo? • Concentrate within current industry, diversify into other industries? • Growth and expansion through internal development or acquisitions, mergers, or strategic alliances?
  79. 79. Corporate Strategy Growth Strategies: – Most widely pursued strategies – External mechanisms: • Mergers – Transaction involving two or more firms in which stock is exchanged but only one firm survives. • Acquisition – Purchase of a firm that is absorbed as an operating subsidiary of the acquiring firm. • Strategic Alliance – Partnership of two or more firms to achieve strategically significant objectives that are mutually beneficial.
  80. 80. Corporate Strategy International Entry Options Exporting Licensing Franchising Joint Ventures Acquisitions Green-Field Development Production Sharing Turnkey Operations BOT Concept Management Contracts
  81. 81. Corporate Strategy Portfolio Analysis – How much of our time and money should we spend on our best products to ensure that they continue to be successful? – How much of our time and money should we spend developing new costly products, most of which will never be successful?
  82. 82. Corporate Strategy Portfolio Analysis BCG (Boston Consulting Group) Matrix – Product life cycle and funding decisions • Question marks • Stars • Cash cows • Dogs
  83. 83. Corporate Strategy • Directional Strategy: Orientation toward growth - • Expand, cut back, status quo? • Concentrate within current industry, diversify into other industries? • Growth and expansion through internal development or Acquisitions, Mergers or Strategic Alliances?
  84. 84. GROWTH STRATEGIES Concentration Current Product line in one industry  Vertical Growth  Vertical Integration •Full Integration •Taper Integration •Quasi Integration  Backward Integration  Forward Integration Horizontal Growth Horizontal Integration Diversification Other Product lines in other industries Concentric •Growth into related industry •Search for Synergy Conglomerate •Growth into unrelated industry •Concerned with Financial consideration RETRENCHMENT STRATEGIES Turnaround Captive Company Sell - Out / Divestment Bankruptcy / Liquidation STABILITY STRATEGIES Pause / Proceed with Caution No Change Profit Directional Strategy
  85. 85. Competitive success is transient...unless care is taken to preserve competitive position Only 16 of the 100 largest U.S. companies at the start of the 20th century are still identifiable today! In a recent year, 44,367 businesses filed for bankruptcy and many more U.S. businesses failed Challenge of Strategic Management
  86. 86. • Rapid technological changes • Rapid technology diffusions • Dramatic changes in information and communication technologies • Increasing importance of knowledge Fundamental nature of competition is changing The pace of change is relentless.... and increasing Traditional industry boundaries are blurring, such as... • Computers • Telecommunications 21st Century Competitive Landscape21st Century Competitive Landscape
  87. 87. The global economy is changing • People, goods, services and ideas move freely across geographic boundaries • New opportunities emerge in multiple global markets • Markets and industries become more internationalized Traditional sources of competitive advantage no longer guarantee success New keys to success include: • Flexibility • Innovation • Speed • Integration 21st Century Competitive Landscape21st Century Competitive Landscape

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